The European economy is in good shape and the economic policies in the region are appropriate,Rodrigo Rato, current chairman of European Union (EU) finance ministers, said Wednesday.

"Our monetary and budgetary policies in Europe are broadly in line with the needs of the economic cycle," the Spanish economy minister told the European Parliament. He said all 15 EU countries were "committed to achieving budgetary stability by the deadline of 2004".

However, he added that better coordination of economic policies was needed in the region. And labor market reforms were needed as the ability of the labor market to adapt to economic cycles would ensure a quicker recovery and the creation of sustainable jobs, which included incentives for people to seek jobs, Rato said.

Rato also said the introduction of euro notes and coins had gone smoothly. "The launch of the euro... has been a success, not just in technical and monetary terms, but also in political terms," he said.